State Administration of Foreign Exchange, Circular on Issues Relevant to Foreign Exchange Control in Connection with Overseas Listing

Main contents: The Circular streamlines and improves foreign exchange control in connection with overseas listing of Domestic Companies by:

(i) largely simplifying operational procedures and examination materials, and imposing control mainly by requiring registration. After an enterprise has completed the registration procedures related to overseas listing as required, it may handle the procedures for opening an account and converting funds through a bank, and there is no longer any need for approval by the foreign exchange bureau; and

(ii) regulating transactions such as the conversion of funds by domestic shareholders of overseas listed enterprises for increasing (or reducing) their overseas shares, and providing a clear basis therefor to adhere to.

Related legislation: PRC Regulations for the Control of Foreign Exchange (2nd Revision), Aug 5 2008, CLP 2008 No.8 p.77

Repealed legislation: Circular on Issues Relevant to Further Improving the Foreign Exchange Control for Overseas Listing, Aug 5 2002, CLP 2002 No.8 p.7; Circular on Matters Relevant to Properly Handling the Foreign Exchange Control Work for Overseas Listing, 2002; Circular on Issues Relevant to Improving the Foreign Exchange Control for Overseas Listing, Sept 9 2003; Circular on Issues Relevant to the Reduction in the Holding of Foreign Exchange Receipts Overseas for Contribution to the National Social Security Fund, 2004; and Circular on Issues Relevant to Foreign Exchange Control in Connection with Overseas Listing, Feb 1 2005

Issued: January 28 2013

Effective: as of date of issuance

Interpreting authority: State Administration of Foreign Exchange

Applicability: The term “overseas listing” refers to the overseas issuance of securities permitted by laws and regulations such as shares (including securities in the form of share derivatives) and convertible corporate bonds by companies limited by shares that are incorporated in China upon permission of the China Securities Regulatory Commission (Domestic Companies), and the public listing and trading thereof on overseas stock exchanges (Article 1).

Main contents: The Circular streamlines and improves foreign exchange control in connection with overseas listing of Domestic Companies by:

(i) largely simplifying operational procedures and examination materials, and imposing control mainly by requiring registration. After an enterprise has completed the registration procedures related to overseas listing as required, it may handle the procedures for opening an account and converting funds through a bank, and there is no longer any need for approval by the foreign exchange bureau; and

(ii) regulating transactions such as the conversion of funds by domestic shareholders of overseas listed enterprises for increasing (or reducing) their overseas shares, and providing a clear basis therefor to adhere to.

Related legislation: PRC Regulations for the Control of Foreign Exchange (2nd Revision), Aug 5 2008, CLP 2008 No.8 p.77

Repealed legislation: Circular on Issues Relevant to Further Improving the Foreign Exchange Control for Overseas Listing, Aug 5 2002, CLP 2002 No.8 p.7; Circular on Matters Relevant to Properly Handling the Foreign Exchange Control Work for Overseas Listing, 2002; Circular on Issues Relevant to Improving the Foreign Exchange Control for Overseas Listing, Sept 9 2003; Circular on Issues Relevant to the Reduction in the Holding of Foreign Exchange Receipts Overseas for Contribution to the National Social Security Fund, 2004; and Circular on Issues Relevant to Foreign Exchange Control in Connection with Overseas Listing, Feb 1 2005